Output 8.1 Infrastructure Finance and Capital Works

Output 8.1 Infrastructure Finance and Capital Works

Overview

The directorate’s Infrastructure Finance and Capital Works Division (IFCW) brings together specialist capability in the management and delivery of capital works, as well as the support of selection, funding, implementation and delivery of complex and major infrastructure projects. The directorate also advises on PPP transactions, including procurement.

The directorate achieves this by:

• advising the Government on procurement and related construction industry policy;
• supporting the delivery phase on major projects;
• administering a range of pre-qualification schemes;
• developing and implementing The Partnerships Framework (TPF) policy, The Capital Framework (TCF) and the Guidelines for Unsolicited Proposals;
• establishing and managing WoG contracts and panels;
• reviewing PPP contract management arrangements;
• providing whole-of-life project transaction support;
• providing governance and secretariat support for major projects, a range of taskforces and other projects as directed by Cabinet;
• coordinating the Work Health and Safety Active Certification Policy for ACT Government construction sites;
• providing commercial support on the assessment of unsolicited proposals; and
• progressing infrastructure reform through new delivery models, improved governance, and better allocation of project risks.

Highlights

Testimonial

The directorate was involved in the following projects, and continues to:

ACT Courts PPP Project - support this project through project management and by providing advice through its membership of the Executive Steering Committee and Senior Representative’s Group;

Light Rail Stage (LRS) 1 and 2 - provide support and advice to the project team of LRS1, in addition to support for LRS2 such as risk workshops, Investment Logic Workshops (ILW) and market soundings;

Unsolicited Proposals - review and assess proposals under the Guidelines for Unsolicited Proposals, in addition to providing secretariat and governance support to the Unsolicited Proposal Steering Committee (UPSC);

The Capital Framework - support The Capital Framework (TCF) by assisting directorates to develop stronger business case submissions, enabling more thorough planning, appraisal and evaluation in the formative stages of the investment lifecycle;

Sport and Recreation Phillip Oval Upgrade - this project has had a number of technical and stakeholder challenges with AFL and Cricket Australia as well as local stakeholders which when complete will provide a significantly improved asset for sporting events at the highest level with new facilities, accessibility improvements with a new lift and improved player amenities;

Continued the Loose Fill Asbestos Insulation Demolition Program - to safely demolish houses in 2017–18 under budget and ahead of schedule;

Secure Local Jobs Code - to consult and work across government and with key stakeholders to implement and operationalise changes to the Government Procurement Act 2001 that will extend Industrial Relations Employment (IRE) Certification requirements over additional industries and provide greater oversight for the ACT Government on obligations applying to companies in those industries that contract with the ACT Government;

Project Management and Reporting System (P-MARS) - to develop a new contract and project management system for infrastructure and capital works is well underway and is expected to be available for full testing and WOG implementation in the second half of 2018;

Other project involvement - providing secretariat services to an increasing number of large or high risk infrastructure projects and internal government committees and processes. It is also developing and will make available a simplified package to support other directorates managing large infrastructure projects; and

University of Canberra Hospital Specialist Centre for Rehabilitation, Recovery and Research (Budget $204.522 million) - this project was completed on programme, with the completion of Milestone One in November 2017 and Milestone Two in February 2018. This project was delivered within budget. The facility will become operational in mid July 2018.

The directorate met or exceeded four of its five 2017-18 accountability indicators against this output:

• Life of Project PPP transactions successfully executed – (Target 100%, outcome was 100%);
• Proportion of relevant projects supported by Infrastructure Finance and Capital Works that have had WHS audits performed in accordance with the Active Certification Audit Program - (Target was >90% - outcome 95%);
• Capital Works Projects:
  • Percentage of Construction Projects Completed on Budget - (Target was 85%, outcome was 100%);
  • Percentage of Construction Projects Completed on Time - (Target was 85%, outcome was 100%)
  • Percentage of contracts awarded to prequalified contractors/consultants - (Target was 95%, outcome was 100%); and
• Proportion of relevant contracts managed by Infrastructure Finance and Capital Works that include the requirement for the contractor to hold IRE Certification – (Target was >90%, outcome was 100%).

The one accountability indicator the directorate did not meet was:

• Proportion of Government funded annual Capital Works program supported by Infrastructure Finance and Capital Works – (Target 90%, outcome 61%). The variance of 33% was due to the service offering of the IFCW having expanded, with more ICFW embedded resources providing ‘in-house’ assistance to directorates to meet their needs. As the delivery model matures and with the introduction of new systems and processes, the indicator as currently measured would be expected to reduce significantly. This indicator will be discontinued as it no longer reflects the nature of the support provided by IFCW to directorates and agencies in delivering the government capital works program.

During 2017-18 the directorate continued to administer and update the following policy frameworks:

• The Capital Framework;
• The Partnerships Framework;
• The Guidelines for Public Private Partnerships; and
• The Guidelines for Unsolicited Proposals.

Future Direction

In 2018-19 the directorate will continue to take leadership on:

• Capital Works delivery;
• WHS Active Certification;
• The Capital Framework;
• Government Procurement Act;
• Government Procurement Board;
• IRE Certification;
• Local Industry Participation Policy;
• the roll out of P-MARS; and
• the implementation of the Secure Local Jos Code.

In addition in 2018–19 directorate will continue to:

• work to ensure procurement reforms achieve greater value for money on all major infrastructure projects and goods and services procurements;
• continue the implementation of P-MARS to provide greater collaboration, project management and reporting capability for Capital Works projects. This will be an internal transformational change process, with the aim of improving the way the Territory controls, manages, forecasts and reports all forms of capital works expenditure, including new works, asset purchases, capital upgrades, capitalised expenditure and ICT capital projects. The new system will be fully implemented in the CMTEDD, Health and Transport Canberra and City Services directorates as part of the first phase, with a view to subsequently rolling it out across all directorates;
• continue to assist directorates in planning and procuring capital works projects by advising on the processes within The Capital Framework: Investment Logic Workshops, Risk Workshops, Delivery Model Workshops, Early Project Overviews and Business Cases;
• continue providing secretariat services to an increasing number of large or high risk infrastructure projects and internal government committees and processes. We are also developing and will make available a simplified package to support other directorates managing large infrastructure projects; and
• facilitate a review of the Capital Delivery which will examine contingency estimation and management, and in particular the appropriate retirement of contingency associated with procurement risk. Additionally the review will consider the reporting on progress of project delivery, including milestone achievement, and in particular the reporting against project value rather than funds appropriated.

Further information can be obtained from

Shaun Strachan
Deputy Under Treasurer
Commercial Services and Infrastructure
+ 61 2 6207 1001
Shaun.Strachan@act.gov.au

Peter Murray
Executive Director
Infrastructure Finance and Capital Works
+ 61 2 6207 5650
PeterR.Murray@act.gov.au